Hill Co. can further process Product O to produce Product P. Product O is currently selling for $60 per pound and costs $42 per pound to produce. Product P would sell for $82 per pound and would require an additional cost of $13 per pound to produce.
The differential revenue of producing Product P is $82 per pound.

Question

Quizplus · Accepted Answer

The differential revenue of producing Product P is not $82 per pound, but rather $82 - $60 = $22 per pound ($82 selling price of P minus $60 selling price of O).

Hill Co Can Further Process Product O to Produce Product P